Close X Cookies are necessary for the proper functioning of 24hGold.com. By continuing your navigation on our website, you are accepting the use of cookies.
To learn more about cookies ...
EnglishFrench
Gold & Silver Prices in

Gold Up 1.5% As Stocks Globally Fall After Nikkei Crashes 7.3%

IMG Auteur
Published : May 23rd, 2013
678 words - Reading time : 1 - 2 minutes
( 0 vote, 0/5 )
Print article
  Article Comments Comment this article Rating All Articles  
0
Send
0
comment
Our Newsletter...

Today’s AM fix was USD 1,386.00, EUR 1,074.92 and GBP 919.16 per ounce.  
Yesterday’s AM fix was USD 1,385.25, EUR 1,071.43 and GBP 917.75 per ounce. 

Gold fell $10.20 or 0.74% yesterday to $1,367.60/oz and silver finished up 0.07%. 

Gold is up today while stock indices globally are sharply down after the Nikkei crashed 7.3%. The stock crash in Japan is leading to weakness in European equities and will lead to losses when U.S. markets open.


Gold - 1 Day – (Bloomberg)

The Nikkei decline is being attributed to the poor Chinese PMI data but the more likely reason is speculators profit taking leading to panic selling. Currency debasement and rampant speculation had led the Nikkei to increase by an incredible 85% in just over 6 months.

Bernanke hinting at reducing Federal Reserve bond buying and balance sheet expansion and a more prudent U.S. monetary policy and the still very fragile Japanese economy likely also contributed. 


Nikkei - 1 Year – (Bloomberg)

Gold is oversold on a host of benchmarks and was due a bounce and the Nikkei plummet and stock weakness in Europe, the FTSE is down by 1.9% and the CAC and DAX by more than 2.4%, have led to gold buying.

Stock losses appear to have contributed to speculators covering short positions and some speculators and investors buying gold again. 

Silver too has benefitted from the renewed ‘risk off’ environment and risen 1.4%.

If there are sharp losses on Wall Street today –increased safe haven demand should be seen. Sharp falls in U.S. equities seem possible given the recent outsize gains despite increasingly poor fundamentals.

However, sharp losses on Wall Street could lead to further short term gold weakness if there is margin call selling. 

There was short covering action yesterday and we expect more short covering however the scale of the losses in Japan overnight and risks of sharp falls in European and U.S. markets mean that in the short term, gold may be vulnerable.

There remains the risk of a massive short squeeze in the gold market as speculators such as Wall Street banks and hedge funds have made “the biggest bet ever against gold prices.” 


Chart courtesy of Zero Hedge

This is likely to propel gold higher recovering much of the losses in recent months. It is likely to do so as the shorts are trend following speculators who are again completely ignoring the very positive gold fundamentals with massive demand for physical and rising premiums globally.

Gold’s price premium on the Shanghai Gold Exchange stood at $22/oz and remained above $20/oz for a fourth consecutive trading day overnight.

India is paying a premium of nearly $40 per 10 gramme bars. Dubai buyers are paying a premium of $7-10 per kilogramme. 

Turkey is reported to be paying a premium of $25 an ounce over spot prices. Hong Kong and Singapore buyers are paying premium of $5 per ounce for gold bars.

Markets are becoming more and more casino like and are now the preserve of speculators.

For prudent pension owners, investors and savers this makes an allocation to physical gold more important than ever.

 
Precious Metals Currency Ranked Returns in USD – (Bloomberg)

Gold’s fundamentals remain sound and volatility in stock markets will lead to renewed safe haven demand for the precious metals.

Gold has had a difficult few months but will reassert itself as an important diversification and safe haven asset in the coming months.

NEWS
“Gold is up today, so far, while everything else is down” - Bloomberg

Companies Mentionned : Metals X | Open Gold |
Data and Statistics for these countries : Hong Kong | India | Japan | Singapore | Turkey | All
Gold and Silver Prices for these countries : Hong Kong | India | Japan | Singapore | Turkey | All
<< Previous article
Rate : Average :0 (0 vote)
>> Next article
Mark O'Byrne is executive and research director of www.GoldCore.com which he founded in 2003. GoldCore have become one of the leading gold brokers in the world and have over 4,000 clients in over 40 countries and with over $200 million in assets under management and storage.We offer mass affluent, HNW, UHNW and institutional investors including family offices, gold, silver, platinum and palladium bullion in London, Zurich, Singapore, Hong Kong, Dubai and Perth.
WebsiteSubscribe to his services
Latest comment posted for this article
Be the first to comment
Add your comment
Top articles
World PM Newsflow
ALL
GOLD
SILVER
PGM & DIAMONDS
OIL & GAS
OTHER METALS
Mining Company News
Opta Min.OPM.TO
Schedules First Quarter 2015 Financial Results Release
CA$ 1.31+0.77%Trend Power :
Financials
IthacaIAE.L
Ithaca Energy Inc. Announces Sale of Norwegian Exploration Business
GBX 51.25+3.54%Trend Power :
Corporate news
Forum Energy(Oil)FEP.L
Forum Energy beats 1Q profit forecasts
GBX 17.50+0.00%Trend Power :
Corporate news
First Majestic(Le-Zn-Au)FR.TO
NYSE stocks posting largest percentage decreases
CA$ 5.85-1.68%Trend Power :
Corporate news
Adriana Res.(Au)ADI.V
Adriana announces that it has filed a NI 43-101 Technical Report on the Lac Otelnuk Project on SEDAR
CA$ 0.11+0.00%Trend Power :
Corporate news
Sherritt International(Co-Coal-Ni)S.TO
Ambatovy Plant Strike Action Resolved
CA$ 2.18+4.31%Trend Power :
Corporate news
Claude Resources(Au-Cu-Ngas)CRJ.TO
Provides Date for Q1 Results and Conference Call
CA$ 0.63-3.08%Trend Power :
Corporate news
Claude Resources(Au-Cu-Ngas)CRJ.TO
Provides Date for Q1 Results and Conference Call
CA$ 0.63-3.08%Trend Power :
Corporate news
Stealth Ventures(Ag-Au-Cu)SLV.V
IIROC Trading Halt - SLV
CA$ 0.01+0.00%Trend Power :
Corporate news
Stealth Ventures(Ag-Au-Cu)SLV.V
Stealth Ventures Inc. Appoints Mark Roseborough as interim CEO and CFO Effective Immediately
CA$ 0.01+0.00%Trend Power :
Corporate news
Comments closed